Solar Lead Inside Knowledge

Downsides of doing your own solar marketing (part 1)

If you are a solar installer, you have inevitably wrestled with the question of whether to do your own marketing to generate solar leads, or to outsource this marketing in one way or another. At the heart of this question, and really with any business decision is a very time tested principle: Do what your good at, leave the rest to the pros. This can be applied to any business function: Accounting, Sales, Marketing, Customer Service, Product Manufacturing, Product Distribution, Product Installation, Maintenance and Servicing. Many, incorrectly believe that if they can do the business function themselves, at a cheaper rate, then they should do it themselves. This simple calculation ignores something very important: Opportunity costs. For instance, if you are a master at installing solar systems, but also decent at marketing your business, you should do both right? Not necessarily. Let’s say that an average installation takes 16 hours of your time, and generates $4000 of profit. Also when you are engaged in marketing activities for 16 hours, you can generate an average of 8 inquiries that result in one installation. Those marketing activities always come at a cost (the cost of printing or postage, or a subscription to constantcontact.com and the writing of a newsletter, etc). For illustration, we’ll say these costs are $1000. Now imagine that purchasing 8 leads that result in one installation, costs a total of $1,200. It would appear that you can generate the business cheaper. But that is only when you ignore your opportunity costs. By purchasing the leads, you save 16 hours of marketing time….16 hours that you could have been doing an installation worth $4000. So in order to save the difference of $200 in marketing costs, you’re forgoing $4000 in profit, with a net difference of -$3800 after taking into consideration your opportunity costs. These numbers are random, and aren’t intended to be a real-life estimation. The point is to highlight that the activities that you know well and excel at are your key to profits. We all have only 24 hours in a day, and we can choose to spend them doing a multitude of different activities….stick to the most profitable one for you.